It seems graphics processing units, or “GPUs,” sales this quarter are doing better-than-expected, thanks to crypto-currency demand among those who use GPUs to “mine” bitcoin and other currencies.

However, demand may cool next quarter, thanks to bans on crypto, and also thanks to the shortage of DRAM:

Our checks with the leading GPU and motherboard OEMs indicate SepQ GPU card trends are very strong, with card shipments coming in ~30-50% ahead of flat q/q expectations on strength from cryptocurrency mining. Cryptocurrency demand is driving strength in NVDA’s GTX 1060/1070 cards. The GPU/motherboard OEMs also noted GPU pricing was up ~25% in the last six months. As we have noted prior (Link – Pricing), the strong pricing and unit trends point to strong OctQ upside to NVDA’s muted cryptocurrency expectations. The OEMs also noted zero inventory of GPUs in the channel and constrained short DRAM supply and pricing also affecting GPU shipments. Coming off a very strong SepQ, there are also expectations in the supply chain that DecQ GPU sales could be muted in pricing and demand on recent cryptocurrency bans and DRAM shortages.

Incidentally, Rakesh has also talked with some suppliers to Apple (AAPL). He is hearing that manufacturing of the company’s products is on course, which would appear to refute remarks by Raymond James’s Chris Caso Wednesday implying a subsequent delay in production of the iPhone X.

Without referring to the X in particular, Rakesh writes that “Despite some recent concerns, there have been no signs of another delay.”

We also met with some of the major suppliers in the Apple supply chain including assemblers, PCB and casings. We believe there has been no recent change in build patterns. Most of the supply chain still directionally points to a strong ~80% q/q pickup in SepQ builds (which was revised up sometime in July from the prior 60-70% q/q) combined with a ~10-15% q/q in the DecQ with little change in the last two weeks.

The lag, however, while expected, he concludes offers upside for Apple suppliers such as Qorvo (QRVO) and Skyworks (SWKS), as the manufacturing scheduled “extends into February.”

B. Riley & Co.’s semiconductor analyst Craig Ellis, who follows shares of semiconductor stocks such as Broadcom (AVGO), Qorvo (QRVO) and Skyworks Solutions (SWKS), today rebuts some of the negative vibes created for the group by a report put out yesterday by Rosenblatt analyst Jun Zhang, who claimed Apple’s (AAPL) iPhone 8 is seeing weak order patterns in China.

Acknowledging Apple’s iPhone “product cycle” is “one of the biggest in late-2017 and early-2018” and therefore, “meaningful” for his covered names, Ellis concedes “the competitor report raises a yellow flag of risk” that he must “continue to monitor.”

He sees a number of reasons not to panic, including the fact China, already in decline for Apple for over a year, is no longer as critical a region for Apple’s sales:

First, Apple’s China sales have declined yy for the past six quarters, the last four averaging -16%. In that light a y/y preorder decline isn’t totally surprising. Even so, investors have expected improved yy product cycle strength as reflected in C16-18E iPhone growth and Street estimates of -5.8%, +5.6%, and +9.8%, respectively. So if China’s weaker yy then other regions will need to outperform. An improving global developed and emerging country GDP growth backdrop could help. Second, the observation’s sample seems small for gauging global product interest. RILY wouldn’t be surprised if stronger demand emerged elsewhere in China or in other regions. Third, with increased competition from fast-growing and value-price focused China tier-1 OEM’s like Huawei, OPPO and Vivo and with Samsung seemingly much better positioned yy, the competitive landscape is robust. It’s possible overall demand is being drawn elsewhere at the moment. Fourth, having been burned in the past by iPhone product cycle weakness we suspect Chipmaker 3Q17 guidance was relatively conservative, so for that and other reasons we doubt the data point by itself puts estimates at risk.

Ellis generally sees favorable content gains in the iPhones, for Broadcom in particular:

RILY commented constructively on 9/12’s iPhone product launch, and our view of chip exposure includes RF companies like AVGO, SWKS and QRVO where we believe content is $5.00 or more and far higher for AVGO following C17’s 40% content gain on increased RF filters, a Bluetooth 5.0 combo connectivity upgrade, and wireless charging content. Alternatively, we’d expect SWKS to retain strong diversity receive content. Beyond the front end, we expect TXN power management content, CRUS for Audio IC’s, and NXPI for NFC control and a mix of memory manufacturers for DRAM and NAND. If the product cycle is weak, we’d view that as an incremental negative for Semi Cap Equipment suppliers like AMAT, LRCX and KLAC which fell around 2% on the day.

Earlier today, I had a chat by phone with Alex Gruzen, who is the chief executive of privately held WiTricity, a young hopeful in the wireless power market.

Like Energous (WATT), whom I wrote about last week, WiTricity’s world has felt the impact of Apple (AAPL), which last week said it would back a competing wireless technology standard, called “Qi.” Despite that fact, Gruzen was upbeat and enthusiastic about a number of initiatives his company has going, chief among them being charging at a distance of electric vehicles.

WiTricity, based in Watertown, Mass., has developed a technology called “magnetic resonance.” It is similar to the “magnetic inductance” offered by Qi, which is found in many devices Samsung Electronics’s (005930KS) Galaxy line of phones, and Apple’s “AirPods” wireless ear buds. Chips for inductance are supplied principally by Integrated Device Technology (IDTI).

WiTricity’s technology is a sort-of cousin to inductance, as it, too, is based on principles of a magnetic coil transmitting power, like inductance. But resonance brings several benefits versus inductance, including the ability to make charging plates where a device doesn’t have to be perfectly aligned with the magnetic coil inside the plate.

In the auto market, WiTricity says its plates will transmit power to the underside of a car chassis from a plate on the ground, over a distance of a foot or more. that makes possible charging while simply parking the car, without having to physically connect it to anything.

Regarding the Apple news, Gruzen noted Qi has had limited uptake from consumers, and he expects even the Apple faithful may demand something more down the road:

In Phones, Apple has put down their marker. Qi has been around a long time, but the customer acceptance has been mild. We’ll see how it gets picked up by the Apple community. You know, we’ve had direct customer feedback about that technology [Qi] for years now, and obviously, our push has been to evolve beyond it. That’s going to capture a lot of the attention in the coming year. In the end we’ll see how customers react. The deficiencies are well known, but it will end up being somewhat ubiquitous because of Apple. I’m hopeful over time some aspects of our technology will come to the fore. People will want higher power and positional flexibility. And if they have a case on their phones, they’ll want to have it still work. We’re still supporting out customers, they’re developing products, and we’ll wait and see how that shapes up. We’re ready when customers want a little more.

I asked Gruzen what he makes of Apple’s announcement of another product, a charging mat called “AirPower,” which Apple says will come out in 2018. Apple says the mat will let you charge multiple devices “without requiring them to be fixed in one spot.” That sounds like WiTricity’s premise. I asked Gruzen how he feels about Apple trying to help the Qi camp to make Qi more nimble.

Gruzen thinks it’s not clear Apple and Qi can resolve all the limitations of Qi technology:

I think one drawback of Qi has been a lack of positional flexibility. The need to be very precise about how you position the phone. There’s the resulting uncertainty for the customer of whether the phone really did charge. It appears from AirPower that that’s what they’re working on, trying to give a little more surface area. That’s all I can I tell. What I don’t know is whether some other issues of Qi, in terms of distance, will be helped. Certainly, things such as not being able to mount it under a table are still going to be an issue. You’re still having a pad on the table. But even on a more practical basis, take an Otterbox [phone] case, or something like that, will it still work? So there are still some unknowns.

Leaving aside Apple and Qi, Gruzen was very enthusiastic about what he calls the “bread and butter of our business,” serving the auto makers as they equip vehicles with wireless charging. WiTricity has financial backing from Toyota Motor (TM), which is a licensee of WiTricity’s technology. And WiTricity has an important relationship with NissanMotor (7201JP).

The company is working with nine of world’s top ten auto makers, either directly or through those car makers’ auto parts suppliers, the so-called “tier 1” parts makers, companies such as Delphi Automotive (DLPH). Products are in development, and Gruzen expects the first vehicles using WiTricity charging technology will be on the road in the first half of next year.

“The vast majority of my team and our efforts is dedicated to this electric vehicle opportunity,” Gruzen tells me.

“Things are awesome,” Gruzen says of those efforts.

We just signed another large Japanese Tier 1 [auto parts] supplier to the automotive industry, and we’ve got the majority of the world’s top auto makers moving forward to electric charging. If you asked me a few years ago what was the big variable for us, I knew back then that we had the technology for charging vehicles; and knew we had the engagement with auto makers for programs; the question was really how fast would EV as a category move forward. This past year has been just remarkable, how the whole industry mindset has shifted to EVs being the primary technology of the future. If you went to the Frankfurt Auto Show last week, you would have seen there how every auto maker was trying to outdo each other with how many cars in their line are EV. Saying things like, we’ll have 25 vehicles in our lineup [being EV] by 2025, etc. That’s pretty exciting. That’s moving kilowatts of power to charge an electric vehicle, at the same speed as if you had plugged it in.

Among the things Gruzen cites as the most important developments is a “major effort globally” to standardize the wireless charging of vehicles, being developed within the Society of Automotive Engineers, known as the “J2954” task force.

That effort will make possible not just to eliminate worries about “range anxiety” for EV owners, but also to enable autonomous vehicles that gas up without human intervention:

Today, depending upon the country, you have to have a different connector [for charging an EV]. The car makers have universally come together and said, never again! Wireless charging will be a global common standard. We, WiTricity along with Nissan, have submitted a proposal for this. The J2954 is run by a great leader who was fromBMW, SAE member Jesse Schneider. That task force is defining the whole interface, everything from frequencies and magnetic fields and the handshake protocols between them, the ground assembly, exchange messages, like “I’m ready for power.” It’s like a complete definition of the protocol for transferring power, including turning it on, authorizing it, etc. You want to ensure that all the German cars and Korean cars and American cars all could charge from a common ground assembly. It’s all using magnetic resonance.

Here’s why it’s really important: so far, it’s only a small percent of users that have purchased electric vehicles. It’s very early adopters, people so far who are very motivated personally to make the choice. Their willingness and interest to plug in every day goes along with their early adopter status. But they [auto makers] need to reach 15% to 25% of consumers by 2030. In some of these countries, they need to reach 100% of new sales. They’re saying, We need to take this new customer behavior, and the fears of range anxiety, out of the equation. Wireless charging means not having to create a new customer behavior. You park your car, and it charges. You don’t have to worry about coming back in the morning to find the car didn’t actually charge. So part of it is recognizing they’re going to get over 200 miles of range in these battery packs, and you park it naturally. For the vast majority of people, they will never, ever have to think about the act of charging at all. For those who need to drive super long distances, there will be fast charging stations along highway corridors, like San Francisco to L.A., where you will pull over to the side of the road, and you’ll tolerate it on those super long distances. The day to day, you will never have to think about it. But Part B of this is autonomy. The two massive themes are electrification and autonomy. There’s just not going to be fleets of autonomous vehicles without wireless charging. Those two things together are why I ended up putting the bulk of our resources into moving this forward.

Sure, but “We want as much supply capacity, and people building the stuff as possible,” says Gruzen. “They’ll need a license to our technology if they participate,” he observes, given WiTricity has “over 100 essential patents,” so competition can boost license revenue.

“First let’s build this market.”

Regarding which auto maker will ship first next year, Gruzen is “not at liberty to say,” and he quickly adds “I don’t know if I ever will be,” given that auto makers tend to be secretive about their technology suppliers.

He notes the “strong relationship with Nissan,” which are “the global leader today in selling electric vehicles.” WiTricity has also “had an announcement of working with General Motors (GM) to test its Chevy Volt.”

“But most announcements tend to be with Delphi and TDK, and IHI in Japan, and other Tier 1 suppliers.”

“The other exception would be Toyota, since they are an early investor in us, and a licensee as well, though I can’t say too much about their activity with us — I wish I could!”

Gruzen noted that “the whole electrification of the industry” is “turning everything upside down, in terms of auto makers and their Tier 1s.”

WiTricity, which you can consider a “Tier 2” supplier, has “a level of direct engagement that would have been unheard of a few years ago.”

You’re seeing that across the board for electric companies. They’re engaging with companies that are making Lidar and radar and optical processing, and all kinds of things. Ten years ago, the auto maker would just have gone to a Delphi and said, Give me this whole system. Now, they’re really seeing their role more as having to engage directly with the technology providers, to understand the technology, to evaluate it, to specify, and then end up telling the Tier 1s what they want. Our business model kind of reflects that. There’s a whole educational stage where we are working directly with the auto makers. That’s happening with nine of the top ten automakers. We are selling them bench systems for their labs, we are doing modeling with them. They may end up specifying with their Tier 1s, we want to launch on this model, and these are the specs, then they’ll go get them [suppliers] to sign a technology transfer agreement from WiTricity. And we, in turn, sell them the reference designs, we do a full technology transfer, and they sign a license for our technology, and we help them get to production. And then we have recurring royalty when they get to production. We also will sell components. So, right now we are in this phase of licensing, and technology transfer, and enablement. From 2018, we shift into the phase of recurring revenue.

Gruzen hasn’t signed definitive agreements with all of those top OEMs; some “are still evaluating,” he says. “But I have a launch map of a sort of platform that runs from now through 2022,” he adds, “With more and more and more platforms with each year.”

Gruzen notes this is a very different market structure from the personal computer business, where he previously ran consumer market efforts:

It’s exciting, but for a startup like us — like, I came out of the PC industry — we had three full product cycles a year. We were thinking about Dads & Grads, about Back to School, and about the Spring Refresh. It was all about how do you develop a whole new notebook computer in 28 weeks. Now, in this world, we’re engaged and working on a car that’s going to launch in 2018, and one in 2021, and it’s a totally different world. But once you’re in, you’re in for a good long time.

The other part of the business is the consumer electronics business. In January, at CES, Gruzen had shown a newly introduced Dell laptop for business customers, containing the charging capability the “Latitude 7285.”

Gruzen said “they seem very pleased with the solution we helped them deliver,” regarding Dell, adding “they will be extending across other products in future.” I asked if he could give me any sales figures for the 7285, but Gruzen said he didn’t have any data he could share.

Working with Dell is for Gruzen analogous to working with the auto makers: a multi-stage process of defining goals.

I described that business model, how we engaged with the brand, and enabled the automotive Tier 1s. And the work with Dell was similar. We engaged with the brand, and came up with the performance metrics, and the user experience they wanted. Then we enabled the supply chain in Asia to build these products. The thing that was exciting about what Dell did is, in the same way autonomous vehicles want wireless charging, and EV customers need to have a certain experience, what Dell did really well was to shift the conversation to the wireless workplace, as opposed to wireless charging, to think about it as part of an experience. What they did was they combined wireless charging with the WiGig standard for wireless displays. And we’ve always had wireless keyboard and mouse, and since the Centrino days, we’ve had Wifi for wireless data. So, it was combining all these things that lets you have this experience were you walk up to a desk, and throw your notebook down, and your keyboard and mouse are active. You have your next meeting, you just grab it and you go. There’s no more docking, there’s no more plugging in cables, there’s no more putting your system to sleep. That was the vision, that’s what they want to extend now.

Dell is the only announced consumer electronics customer for WiTricity, in terms of actually shipping product, and so I asked Gruzen if he has any deals with other manufacturers aside from Dell, to which he replied, “Yes, but I can’t tell you.”

“There will be more small-device consumer electronics makers,” he said, noting that The AirFuel Alliance, the consortium promoting wireless power, of which WiTricity is a member, “is active, and there’s been a big push in Asia, to engage with the communities, and there are a bunch of new companies there that joined as members,” who can be future customers.

The challenge with consumer electronics, notes Gruzen, broadly speaking, is that it is “a space where standards are in a lot of flux,” for wireless power.

“Solutions are spread between what you do for wearables, and phones, and PCs.”

And then, there’s the hype, he says.

“And, there’s just a lot of companies out there that talk about wireless power but not a lot that have ever productized a product on a global basis.”

I asked Gruzen if he meant any one company in particular.

“I wish there were just one!” he replied. “There are a whole bunch of them. I end up having to deal with, and to address, a half-dozen small companies around the world that make lots of claims about wireless power but that have never shipped anything. It sets customer expectations very high.”

I asked if he was referring to Energous in particular. Gruzen said he gets on well with Energous’s CEO, Steve Rizzone. “You know, actually, I like Steve, we have good conversations.”

Then he took an indirect swipe at the company, saying that “the challenge with a lot of companies is, you know, being crisp about the user experience, and then delivering on it; most of these companies have been all over the map, versus what you actually can really do.”

Gruzen mentions a positive example of a startup, Ossia, saying, “I like the team, the founder is a sharp guy, and they are also competing in that RF [RF Power, like Energous] space, but they have been very measured and practical in terms of what they say is possible.”

“I think in the end they will likely deliver something that works, and delivers on what he promised; that’s quite the contrast to the approach Energous has taken.”

Regarding funding, WiTricity’s last round was in 2015. Gruzen said there is no further funding planned at the moment, as “we have plenty of capital to go pursue the business.”

Gruzen declined to provide detail on the current financials of the company.

Shares of in-flight Wifi provider Gogo (GOGO) are down 97 cents or almost 7%, at $13.23, after Northland Capital Markets’s Paul Penney today initiated coverage of the stock with an Underperform rating, and a $6.75 price target, writing that fierce competition will delay its ability to become profitable, and will strain its balance sheet.

And discount airlines, its next opportunity, don’t hold much promise, he thinks.

As a result, “we believe GOGO’s shares are excessively overpriced on both an absolute and relative basis,” writes Penney, referring to a multiple of 18.8 times his Ebitda projection for next year, compared to valuations for peers of 6.7 times.

“We believe a more rational valuation level to be $6.75/share, which equates to 11.25X our 2018 EBITDA estimate of $92.3M.”

Penney writes that what “sparked our apprehensions” are estimates calling for an 86% or create jump in Ebitda next year, to $113 million, after a decline of 9% last year, in a “hyper-competitive” market for airplane WiFi.

There are six or seven competitors in any given market, notes Penney, and “as we looked closer at both Gogo’s domestic and international market share positioning, we believe there is an increasing level of vulnerability driven by a blend of evolving airline customer dynamics, increasing commoditization and technology related deficiencies.”

On the domestic (US) side, GOGO is the clear market share leader today with ~66% of the total market (equating to ~2,791 total connected planes) and represents ~59% of total revenues. However, we believe there are clear signs of risk in GOGO’s dominance today, as the airlines proactively move away from having a sole connectivity provider to a “multi-sourced” model. In the end, the airlines motivations for moving to a more diversified service provider model could be driven by a variety of different factors: 1) Lower costs, 2) Improve technology related offerings, 3) Broaden bandwidth capacity and/ or 4) Drive faster implementation timing.

Already, American Airlines and Alaska Air have been swapping out Gogo, he writes:

In fact, these “clear signs of risk” have been clearly tangible and more frequent of late; as two of GOGO’s sizable US customers (American Airlines and Alaska Airlines) have either undisputedly moved or threatened to move their IFC business from GOGO to a competing IFC provider […] At the time, an American spokesperson clearly articulated their desire to multi-source so they could “upgrade our fleet with the latest and fastest Wi-Fi service as quickly as possible”. More recently in August 2017, GOGO’s long-term customer Alaska Air put out a competitive RFP (Request For Proposal) that ultimately concluded in a re-newel agreement with GOGO. While many investors and bullish analysts misperceived this announcement as a “new customer win” for GOGO, we believe it not only clearly demonstrates the airlines desire to aggressively look to reduce costs / enhance their quality of service, but likely resulted in a reduced contractual rate.

Bulls, he writes, would like to believe there are “4 domestic airlines that are potential new GOGO connectivity customers,” but he thinks that’s wishful thinking, especially given the four most likely, including Spirit Airlines, are “ultra-low cost carriers,” the discounters.

They “charge for everything and anything they can,” including water, coffee and soda, Penney observes.

“We believe the likelihood of one of these airlines investing in IFC or having their customer base pay much of anything for the service greatly tempers our enthusiasm for any meaningful level of incremental revs / EBITDA contributions.”

The “field of dreams” nature of this business will continue to drive costs up for Gogo, he opines:

The long term bull case on GOGO rests on the old adage from the 1989 baseball movie classic Field of Dreams – “If you build it, they will come”, as GOGO’s near term high / accelerating levels of CAPEX and OPEX will soon dissipate with an eventual boost in revenues / EBITDA on the other side. We believe this long term theory is far reaching and flawed, as new connected aircraft installation and ongoing IFC service costs will remain stubbornly high for GOGO.

I last met with Rizzone back in January, at the Consumer Electronics Show in Las Vegas. Energous shares have suffered mightily this year, falling 35%. Things were not helped by the fact that Apple (AAPL) on Tuesday said it will equip its next iPhones with wireless power that complies with a competing technology, the Qi wireless power standard. Qi is already widely deployed, and supported by other giants like Samsung Electronics (005930KS).

That has pushed down Energous stock 11% in the last 48 hours. The Apple news will be especially distressing to some bullish investors because Energous has said for over a year it has one very large “strategic” customer, and some people had presumed that would be Apple, but that is clearly now not the case.

Rizzone told me that “Things continue to progress, like we’ve talked about, and we are focusing on the three major milestones that we expect to complete in coming months.”

Those milestones include the “first certification” by the Federal Communications Commission for the company’s “power at a distance transmitter”; the shipment of the first consumer products with WattUp; and the “shipment of our first power at a distance transmitter.”

Rizzone said the “relationship with our key strategic partner continues to move forward,” referring to the large customer that had been thought of as possibly Apple. Rizzone says he is still not at liberty to reveal the name of the customer, adding “We have a very tight proprietary agreement with the partner.”

“We are continuing to drive that opportunity forward,” he tells me. “It’s milestone based; there are milestones in progress as we speak.”

I asked Rizzone if he could give me a time frame for when the three goals will be achieved. “We’re talking months,” said Rizzone. “We believe we will have the FCC certification and be shipping our first WattUp receivers, and near field transmitters, before the end of the year,” he notes. The current generation of receivers and transmitters don’t require the more grueling FCC certification, though they still require FCC approval just like all products.

“We believe the mid-field transmitters, there’s a possibility before the end of the year, but that may roll into the beginning of 2018,” said Rizzone. “It really depends on the timing of the FCC certification.”

I asked Rizzone whetherhe’s concerned that Apple has just thrown its weight behind Qi.

He indicated he was not concerned, instead saying “it’s generally positive for the wireless power industry as a whole.”

I mean, Qi has been around for a number of years, and has the majority of placements. I think it’s a response [by Apple] to competitive implementations. I also think that it’s going to meet with the same kind of response from the consumer that the rest of the inductive [charging] implementations have met, which is lukewarm. We would imagine that because it’s of its very limited utility. We view all of this as first-gem technology. We are very focused on bringing to market the real promise and potential of wireless power, including significant power at a distance, with full mobility.

Rizzone observed, later on in the discussion, that some decisions on technology by electronics firms are made years before a product ships. “Product cycles for consumer tech range from a year to two years; those decisions were made back in 2016 or 2015″ for products shipping now, he said.

The implication being, Apple had to choose a technology long before Energous was ready to offer chips.

I asked Rizzone how his company’s cash position is and if there’s a need for any imminent financing activities. He said the company is “doing well on managing our finances, as we said last quarter,” and indicated no need for immediate money raising:

We see a range of quarterly expenses of $8.5 to $9 million per quarter, though it’s a bit lumpy depending on our timing of tape-outs of silicon chips. Each one is expensive, and can impact quarterly expenses. We have significant cash in the bank for a number of quarters, and we are being very patient. We want to see how chip sales roll out. We announced last quarter the first orders from customers for our silicon. We will start to fill those orders this quarter, from Dialog [Semiconductor (DLG), a chip manufacturer that has a minority investment in Energous.]. We are starting now to have revenue streams from silicon, and we continue to generate the engineering services revenue we have had, based on completion of strategic milestones with our partner. I also look at our options. We have gone to strategic partners the last couple times, so we have a number of options. We are being patient and very careful with expenditures.

I asked Rizzone if the company is staffing up, and he said it is:

Yes, we are staffing up in two ways. First, we are shifting our resources away from core engineering like hardware and software, where the bulk of the work has been completed, and focusing now on expanding our reference designs and expanding our silicon teams, and antenna teams, and especially our field applications engineering teams, to meet with the demand we have from consumer electronics and IoT companies to work with them to integrate into their devices. We are a fabless semiconductor company, and we engage with consumer electronics and IoT companies all the time, and we have to work diligently with them to integrate the technology.

I asked Rizzone if Energous will be at CES this year and he said it will be one of the more important events for the company. “I think this will be a good CES for us,” said Rizzone.

“I think we’ll have a smaller individual presence, because our technology is well known, and our customers now are more than we can support, and so we’ll be reducing expenses as it relates to our own participation, but we also will be heavily involved in a number of other private suites and booths on floor.

In summation, said Rizzone, “I think the company continues to aggressively move forward”:

It’s important to note that we are less than four years old as a company. We are talking about rolling out a technology that has the ability to fundamentally change a major consumer paradigm. These types of things do take time. Some decisions were made years ago, or certainly several several months ago. It’s important to keep in mind we have our product cycle, our technology is real, it’s prime time, it’s fully qualified. And we are beginning the process of formal integration into production cycles for consumer devices. We think 2017, we will ‘cross the chasm’ into full commercialization. 2018 is about a significant ramp in the number of consumer devices, and customers with WattUp-enabled technology, and the resulting revenue. And 2019 will be a major, major break-out year, in terms of revenue from customer devices. And so, again, we are on target. We are on our way. The vision we set forth a little over three and a half years ago, in terms of WattUp-enabled devices, is happening. We’re focused and extremely confident, and optimistic, and so we’ll close out the year right, and we’ll see you in January.

The Street today is assessing the lift to component suppliers of Apple’s (AAPL) new iPhones and Apple Watch and Apple TV, unveiled yesterday during Apple’s media event in California.

Among the notes, Chris Caso of Raymond James, who follows shares of chip makers Qualcomm (QCOM) and Intel (INTC), writes today that there appears to be no change in the relative standing of the two companies in supplying the “baseband” wireless modem chip for the iPhone, compared to last year, when Intel for the first time won some business away from Qualcomm for the parts.

Caso has an Underperform rating on Intel stock and an Outperform rating on Qualcomm shares.

“Last year, Qualcomm supplied the baseband to CDMA versions of iPhone and Intel supplies basebands to GSM versions,” observes Caso, “and based on information available at launch, that doesn’t appear to change this year.”

Intel’s baseband does not currently support CDMA – therefore the GSM versions of iPhone still won’t work on CDMA networks such as Verizon, Sprint, at Japanese carriers, or at China Telecom. As was the case last year, at launch there appears to be a single SKU for China (using QCOM’s baseband), which works on all three Chinese carriers […] One difference we did note this year is that Apple is offering a “SIM-free” version of iPhone 8 at launch that will work at all carriers. The SIM free version uses Qualcomm’s baseband (since only Qualcomm can operate on all carriers). Last year, Apple did offer a SIM-free version, but waited several months after launch.

Bear in mind, writes Caso, that Apple may introduce a revised model of the phone for China Mobile (CHL) that uses Intel’s modem, because China Mobile is such a big customer. “We would expect Apple to take a similar approach this year,” and that could be “an important determinant” of the mix between the two vendors.

Caso also notes that Skyworks Solutions (SWKS) and Qorvo (QRVO) are each tied to the fate of the two vendors: “Assuming our assumptions are correct, Skyworks would tend to benefit from a higher mix of Qualcomm/CDMA, and Qorvo would tend to benefit from a higher mix of Intel/GSM.”

Intel shares today are up 17 cents, or half a percent, at $36.27; Qualcomm stock is down 9 cents at $50.81; Qorvo shares are off 29 cents, or 0.4%, at $72.66; and Skyworks stock is down $1.02, or 1%, at $105.85.

Chip stocks are cheap, historically speaking, says CFRA’s Angelo Zino, but revenue growth is also at a “peak,” which means you should buy reasonably priced names such as Broadcom (AVGO), and not chase growth stocks, such as Nvidia (NVDA).

A lot of investors, writes Zino, are asking whether semi stocks are “overvalued,” given a 70%-plus run up in the Philadelphia Semiconductor Index (SOX) over the course of the past two years.

Our analysis is based on a basket of the 25 largest semiconductor stocks within our STARS coverage, utilizing an equal-weighted approach. We find these stocks currently trade at expected earnings estimates (as of September 1) of 16.9X over the next twelve months (NTM). When compared to historical forward P/E multiples, these stocks have traded at 3, 5 and 10 year averages of 18.3X, 17.7X, and 17.4X, respectively. Since the start of 2012, the benchmark has traded between a range of 14.2X (June 2012) and 20.4X (August 2016). Recent multiples compression demonstrates earnings expectations outpacing stock performance. We note valuations are also below that of the projected broader S&P 500 index and S&P 500 Technology Sector, which currently trade at 18.2X and 18.8X over the next twelve months.

Zino explains why in his view “revenue growth rates for the industry appear at peak levels”:

While year-over-year revenue growth rates for the industry have been between 15% and 20% over the last four quarters, levels not seen in over 6 years, we expect revenue growth rates to decelerate to low-to-mid-single digit levels in the first half of 2018. We attribute this to much tougher comparables post a highly anticipated iPhone launch coupled with a no-growth environment for PCs/tablets. We note that growth rates and multiples for the industry have a correlation coefficient of 0.69X since the start of 2012, indicating a strong linear relationship between the two variables. Given our view about peak growth rates and now less upside to consensus estimates following recent revisions, we see multiples likely trading towards the lower half of their historical ranges.

Zico lauds the valuation and fundamentals at Broadcom, writing:

Broadcom trades at a NTM P/E multiple of 14.7X based on Capital IQ Consensus Estimates. This compares to its three- and five-year historical forward P/E averages of 13.3X and 13.1X, respectively. While AVGO trades above its historical averages, we note its multiple resides 19% and 22% below the broader S&P 500 and S&P 500 Technology Sector indices. We believe AVGO is among the most attractively valued chipmakers given its diversified end-market mix, potential upside to consensus estimates, and free cash flow potential. Near term, we see improving wireless trends supported by greater content per mobile device, with AVGO’s products to increase significantly in the next iPhone release. We believe AVGO can generate a long term free cash flow margin of 35%, the best in the space, with the potential to nearly double its dividend towards the end of the calendar year.

Nvidia has the best potential, but the stock’s overdone:

NVIDIA is likely the best-positioned among all the chipmakers under our coverage universe given its graphics processing units (GPU) are being embedded in more end-markets. We remain optimistic about secular growth opportunities within data centers, gaming, automotive, and professional visualization. Despite its higher growth prospects, we believe shares are likely to trade range bound and multiples compress amid a lower overall growth environment. NVDA currently trades at a NTM P/E multiple of 40.9X based on Capital IQ Consensus Estimates. This compares to its three- and five-year historical forward P/E averages of 21.5X and 18.5X.

While shares of Micron Technology (MU) have “the most depressed multiples” in the entire chip industry,” Zino finds the company’s focus on the “volatile DRAM and NAND” markets to be “concerning, given our view that significant supply will be added in the coming year.”

He likes Intel (INTC), which trades for 11.6 times the next twelve months’ estimated earnings, and thinks worries about the “state of the PC market” and about “competitive pressures” are “warranted” but also “overblown.”

Broadcom shares today are down $3.29, or 1.3%, at $249.44, while Nvdia stock is off $4.81, or 3%, at $165.65.

Sony provided me with a loaner unit, and I’ve been trying it out for a few weeks.

Digital Paper is a 9 x 12 slab, a quarter of an inch thick, that displays things using e-ink, the technology found in Amazon’s (AMZN) Kindle line of e-readers (developed by E Ink Corp., a subsidiary of Taiwan’s YFY Group.).

Its main purpose is to display documents in the “PDF” format, to let you sketch notes with an included stylus, and to display anything you would normally print from your desktop or laptop. It retails for $699.

My preference is for devices that do some things really well, even if they leave out a lot of other things. The Digital Paper, or “RP1,” as it’s technically christened, has been stripped of a bunch of things. It doesn’t have a Web browser. It doesn’t connect to any e-book stores, such as Amazon’s Kindle Store or Apple’s (AAPL) iBooks. It doesn’t have a back-light, so you need to read it under the sun or in a well-lit indoor place. It is not meant to be a tablet computer.

It is just kind-of an endless ream of paper.

But in its simplicity, the Digital Paper is magnificent. The entire surface of the device is smooth, there’s no physical lip or “bevel” along the border of the screen, as with Amazon’s Kindle. It has a “bezel,” in the sense that it has a border of darker color around the main display area, but it’s completely flush with the display area. The device feels supremely lightweight in the hands, weighing in at 12.3 ounces, just slightly more than the weight of Apple’s iPad mini (10.72 ounces). The slate is so elegantly balanced, that the first time I held it, afterward, the iPad mini seemed fairly heavy by comparison.

Friends and colleagues to whom I showed it were generally stunned. No one could believe how light it is, how sleek. The “form-factor” as they say in the trade, is a real winner.

There are just two buttons, a power-on, power-off button along the top edge, and a button in the middle of the bezel along the top that serves as a home button, to bring up a menu. That menu shows the battery status and takes you to the Settings screen, or to your documents, or lets you quickly add a new note.

Its 13.3-inch screen has a resolution of 1,650 pixels by 2,200 pixels. That is much lower-resolution than the display of Apple’s 12.9-inch iPad Pro, which offers 2,048 by 2,732. But it doesn’t matter at all for note-taking and reading PDF documents. The resolution is crisp and clear, and fonts show up beautifully, as do the details of hand writing.

As one works with e-ink in various devices, one notices that the base or ground state, if you will, of e-ink, its off-white, neutral tone that is there when power is off or when nothing’s being drawn, can actually vary quite a bit in its hue, from cooler to warmer.

Some implementations I’ve seen are less attractive than others. The Sony version is one of the better ones that I’ve seen, a bit brighter than some versions.

The RP1′s touch-screen is fast and responsive as one scrolls through pages with a swipe of the finger from right to left across the surface. Sony have done a very nice job layering touch controls on top of the basic e-ink display. As well, the stylus is smooth and responsive when writing text or doodling.

You can use the stylus to write on top of PDF documents. You can also highlight text by pressing one of the buttons on the stylus. And any annotations can be erased by pressing the other button. All annotations can be saved to the document so that when you sync again with the desktop, your computer retains the marked-up edit of the document.

The display is large enough that one can split it in half, displaying a document on one side, and a note pad on the other side, and work on the notes while flipping the pages of the document.

Getting things onto the RP1 happens in one of two ways, both made possible by a Sony application running on a Mac or Windows machine. Yes, this is not a cloud computer; it must be tethered to a desktop or laptop.

You can drag and drop documents into the application and they’re swiftly sync’d with the RP1, either by WiFi connection, or by a direct Bluetooth wireless connection established between the PC and the RP1.

Or, you can print anything you see on your screen and the Sony app will send it to the RP1. Digital Paper, essentially, becomes your local printer replacement.

I found I did a lot of my reading on the thing in this fashion, as a way to take with me things one might have printed as a stack of paper. A keyboard pops up on screen when one needs to search through that pile of documents by title, say. It’s a perfectly responsive keyboard, with no noticeable lag.

The sync operation is fairly swift, and printing stuff makes it show up almost immediately on the slate. I had only one gripe: It would be nice if the RP1 would wake itself up — or get woken up — automatically when it’s in “sleep” mode, which is how it saves power.

Instead, if the device is asleep — it goes to sleep after a period of time, to save power — one has to turn on the RP1, and go to the Bluetooth menu in the computer’s menu bar, and instruct the RP1 to connect again. That’s a fairly simple process, so it’s not a big deal in practice. And most connected gadgets stumble over that sort of thing. But it would still be nice if things could be that smooth.

It’s also possible to assign a folder in the Sony desktop app to be a sync folder that connects to Dropbox, or another file store. That way, you can update the Dropbox folder and stuff automatically gets sent to the RP1.

Sony quotes a battery life of up to three weeks, although that assumes very sparing use — on the order of one hour per day reading stuff, and having the wifi and bluetooth turned off. I tended to get several days to a charge because I would leave WiFi and Bluetooth on.

Now, being perfect in what one does, does not mean that what one does not do will not become an issue.

The one shortcoming here is the lack of a “cloud” strategy. Most people to whom I showed the Digital Paper immediately asked what e-book system it used. Everyone these days expects that there’s a tie-in to a content system that’s accessible anywhere, not just when tethered to a machine. And for most people, just PDFs may not be enough. Also, several people wanted to know about connecting to Evernote, the very popular note-taking application that can be a repository in the cloud for all that one creates. Microsoft’s (MSFT) OneNote is another popular possibility.

I presume that sort of thing could come about with future software enhancements to the Digital Paper. In my conversations with Sony, it seems clear to me that they are aware that things such as sync’ing with Evernote are the kinds of things that are important, and they are considering them. We may yet see a cloud strategy added to the device.

In the meantime, it’s a beautiful gadget that returns to certain basics, refreshingly so. Just a nice, simple way to consume or create text. That makes it an odd thing in this age of constant connectedness. Digital Paper makes a lot of sense if one thinks of it as an adjunct to other ways of working, as perhaps a note-taking device for meetings, or a supplementary reading device that is not a replacement for a tablet computer. My ideal would be to have a couple of RP1 units, one sitting by the home computer, one at my office.

The thing clearly has some popularity, as it appears Sony is making all they can sell, and it is taking weeks, currently, to get an order filled, although B&H Photo in New York appears to have supply, as of this writing. So if you want to get it for someone on your gift list, you may want to put in an order soon.

Shares of Broadcom (AVGO) are down $9.76, or almost 4%, at $245.29, after yesterday afternoon reporting fiscal Q3 results, and offering an outlook, that both were better than the Street expected, but just weren’t enough.

The sag in the stock price today is in contrast to several price target increases on the Street.

While the results and outlook were a bit underwhelming, the bulls — and the Street is entirely bullish, at this point — only care about the things that are working.

Those include the company’s rising share of chips in Apple’s (AAPL) forthcoming “iPhone 8,” and what are regarded as very healthy profit margins, and a rising dividend.

Hans Mosesmann with Rosenblatt reiterates a Buy, and raises his target to $300 from $270. He sees “cross-currents” that the Street has to “ponder,” the main two being “a huge guide for smartphone sales growth in the October quarter (over 30% q/q)” and “a troubling HDD inventory correction and weakness in China (optical and broadband access).”

“We net/net this as positive for Broadcom.”

B. Riley’s Craig Ellis reiterates a Buy rating, and a $305 price target, writing that even though the outlook this quarter was merely “in line,” in the Street’s view, nevertheless, “numerous incremental positives show AVGO remains strongly on track for diversified and margin-rich communications growth.”

The iPhone is going to continue to pay off past the current quarter, he predicts: “Wireless should rise 30-40.0% qq on the iPhone build and after that 1Q should be flattish with the above-seasonal stability due to the iPhone 8′s late build timing, which has been widely speculated.

Mizuho’s Vijay Rakesh, reiterating a Buy rating, writes that it was a “good” quarter, and he raises his price target to $290 from $275, after raising estimates.

Wireless was the star, he writes, and Broadcom will likely see its share of RF chips rise in devices with newer networking standards: “We believe RF content growth with WiFi .11ax, CA on the uplink, and transmit MIMO (currently only downlink CA and receive MIMO) could further drive handset RF content.”

He expects a dividend increase next quarter, writing “the company could raise it another 60-75% after doubling it last year.” That would be “6x the market and 7x semi peers,” he writes.

MKM Partners’ Ruben Roy reiterates a Buy rating, and hikes his price target to $274 from $261, writing that the company commentary suggests Broadcom is “now seeing its sales into the AAPL iPhone 8 builds at full strength.”

The stock is cheaper than peers’, he writes, and “we continue to expect AVGO’s valuation discount to the peer group average (~14.9x versus 18.3x) to narrow.”

Aberle had for some time overseen the licensing portion of Qualcomm, “Qualcomm Technology Licensing.” The departure comes as Qualcomm is enmeshed in legal battles with Apple (AAPL) over royalties for the iPhone, and as regulators in various countries look into Qualcomm’s practices.

Qualcomm said the current director of the Licensing group, Alex Rogers, will report directly to Mollenkopf.

Aberle’s exit is being taken by bears on the stock as a bad omen.

Bernstein’s Stacy Rasgon wishes Aberle well, and has “empathy” for “any personal reason” he has to move on, but “we are hard-pressed to imagine worse timing to exercise such an action, and the market is likely to view it as a clear negative given the deteriorating situation with AAPL and other licensees.”

“At a minimum it suggests to us that the pressures at the company are likely to get worse before they get better (otherwise why leave now?).”

Rasgon notes Qualcomm CFO George Davis tells him Aberle had been looking to move for some time:

We were told that Mr. Aberle has been considering leaving for some time in a search for “more balance;” we were pointed to a retention bonus awarded to him last July ($5M for continued employment through October 2017, and $5M for execution against “performance goals”) as one indicator of this. The company also suggested they have been working for a while to put a bench in place in the event that Mr. Aberle did in fact choose to move on, in part through the promotion in October 2016 of Alex Rogers to EVP and head of QTL (which he actually has run since the prior March). We note that Mr. Rogers has almost as much tenure as Mr. Aberle did, was the #2 person on the NDRC negotiations, and has led the company’s litigation efforts for years.

Similarly, William Blair’s Anil Doradla, who rates the stock Market Perform, writes “We are incrementally skeptical of Qualcomm’s licensing business model with this announcement.”

There are a few possibilities here, and they don’t seem good writes Doradla:

Mr. Aberle’s departure only adds to the company’s ongoing headaches with its licensing segment and we believe it could not have come at a worse time. This news will come as a surprise to the investment community, especially given the multitude of licensing challenges the company is facing. Mr. Aberle was crucial and instrumental in shaping Qualcomm’s licensing strategy for over a decade and has been credited for the company’s success with multiple legal challenges it has faced. We viewed him as the third most senior executive (after Chairman Paul Jacobs and CEO Steve Mollenkopf) on the executive committee (he was also the only president along with nine executive vice presidents). From our point of view, there are three possible reasons for his departure: 1) it was his own choice as the press release suggests; 2) recent failures on the licensing front took a toll on his job (more likely, in our opinion); or 3) his departure could mark a new strategic direction on the licensing front (highly unlikely, in our view). Whatever the reason, the departure of the senior most executive in the licensing business will be viewed as increasing uncertainty and does not bode well for the company. We are maintaining our Market Perform rating.

Some bulls, however, are coming to Qualcomm’s defense, arguing that the company had been preparing for the likely departure of Aberle, and that Rogers is capable of moving forward negotiations with Apple and other tasks.

Stifel Nicolaus’s Kevin Cassidy, who has a Buy rating on Qualcomm stock, writes that “we are expecting Qualcomm’s QTL leadership transition to be relatively transparent.”

“In our view, Mr. Rogers’ past experience has prepared him well for the position. We congratulate Mr. Aberle on his success at Qualcomm.”

“Mr. Rogers helped to conclude key licensing agreements in China, been involved in numerous IP and regulatory matters and launched new teams within QTL focused on technology, product strategy, compliance and relationship management.”

Rod Hall with J.P. Morgan, who has an Overweight rating on the shares, writes that “While Mr. Aberle’s departure is coming at a challenging time for Qualcomm, we don’t expect any material impact on the company’s operations or its ongoing lawsuits because of it.”

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.